Competitors, Analysts Scratch Heads at Cisco Unified Computing

While many applaud the networking giant’s entry into the server market, some competitors and analysts are failing to see the wisdom or benefits of Cisco becoming the one-stop data center shop.

Solution providers, analysts and bloggers erupted in a flurry of comment as
Cisco Systems announced its unified computing initiative. And while some
applauded the company for its chutzpah in entering a market in which it has no
presence currently, an even larger group was scratching its collective head and
asking, "Why?"

"My first reaction was shared by a few people out there [in the blogosphere],
which is Cisco is making a bold move in a market where it has zero market
share," says Mike Banic, vice president of marketing for Juniper Networks’
Ethernet Platform business group.

Cisco announced its entry into the server market through its Unified
Computing initiative, which will employ technologies and a partner ecosystem
enabling virtualization technology, services and blade servers to power the
next generation of data centers.

While the idea is a solid one, enabling Cisco to be an end-to-end vendor in
the data center, it has a large summit to scale in getting customers on board,
many say.

"Despite the strong showing of partners at this launch, Cisco will have to
win over enterprise server buyers who up to this point have had no relationship
with the company," wrote James Staten and Galen Schreck of Forrester Research
in their blog. "We think UCS will succeed mostly in green field deployments
inside of companies who have a strong strategic partnership with Cisco. As they
realize the gains promised, others will start to take them seriously."

Juniper’s Banic agrees. "Cisco is trying to sell into a new market where
enterprise customers treat their existing server vendors as their trusted
advisers," he says. "Those companies have a strong foundation and strong
businesses with even broader product lines."

Banic questions the openness of Cisco’s new technology. "What they’ve
announced has a lot of proprietary hooks," he says. "Their Ethernet technology
is not standard, and their standards for converged I/O won’t be in place for
another year or two. That goes against the desire for choice and flexibility in
the marketplace.

"This technology pens customers in—it’s proprietary. Interoperability is not
even a choice at this point," he adds.

Cisco, however, said the technology, for the most part, is standards-based.
"This system is based on industry-standard processor architectures, memory
architectures, network architectures, storage architectures and cabling
architectures," the company wrote on its Website. "We avoided doing anything
proprietary everywhere we could. … Even the APIs used for management and
provisioning were designed to co-exist and based on extensible semantics and
open interfaces."

Still, Banic admits to having a hard time seeing the cost savings in
companies moving to Cisco’s new technology. "I’m trying to understand what
substantiates Cisco’s claim that this technology can lower cap x [capital
expenditures] and op x [operational expenditures]—from the information that’s
been provided so far, there’s insufficient data. Part of that, I’m sure, is
it’s just too early to see," he says.

While much, if not all, of the technology announced today won’t be available
for many months, David Tan, CTO and
co-founder of Chips Computer Consulting in Hicksville,
N.Y., says Cisco might be a welcome
addition in the server space.

"I think they’ll bring a fresh perspective and will help shake things up,"
he says. "I see that they needed to find a way to extend their footprint, and
this makes more sense than owning just a piece of the data center."

However, from a business perspective, "I don’t understand why they would do
this now, especially since no one in that space is making money," Tan says.